Exports to power Ford's India growth strategy

US car major Ford is targeting to export over 2 lakh cars from India by 2020 as it plans to make the country a hub for compacts, mini sedans and small SUVs.Pankaj Doval | TNN | August 03, 2015, 07:29 IST

Ford India has upgraded its popular SUV, the Ford Endeavour, with new features and refreshed stylingNEW DELHI: US car major Ford is targeting to export over 2 lakh cars from India by 2020 as it plans to make the country a hub for compacts, mini sedans and small SUVs. The plan is to export half of the cars it makes in India by that time — at 2.2 lakh vehicles — and sell them across Europe, Latin America and Africa.

The company, which is in India since around 1995 but has failed to make deeper inroads, is planning products that appeal both to the domestic market as well as key export countries.

Targeting a larger pool of countries will provide the company benefit of economies of scale and bring down its production costs, making the vehicles highly competitive, India president and MD Nigel Harris has said.

"These would be global B platform vehicles," Harris told TOI as the company now prepares to drive in a new entry sedan — Figo Aspire — into the Indian market.

"We expect to have a production capacity of 4.4 lakh vehicles by 2020, and of this we expect half of the cars will be sold overseas in markets across Europe, Africa, Middle-East and Asia-Pacific," he said. "An export strategy gives you scale and can help you achieve certain cost targets."

The sub 4-metre Aspire, which will be launched this month, has been designed with a special focus on the needs of Indian customers. But it debuts in one of the most intensely-competitive segment of the market, after the compact cars. Maruti Suzuki's Dzire dominates this category with average monthly sales of around 16,000 units, and other challengers are models such as Honda Amaze, Hyundai Xcent and Tata Zest. Harris said that Ford hopes to break into the segment as it looks at an aggressive pricing while also offering some segment-first features like dual airbags, which will come in as a standard fitment.

The company has already been compensating for the loss of form in India by exporting vehicles aggressively. It sold 81,703 cars overseas in 2014-15, more than the sales in the domestic market

The company is hoping to attain the same success with the model that it had managed with the entry of the Figo hatchback in 2010 and the Eco Sport compact SUV in 2013.

Ford's passenger vehicle sales fell 11% in 2014-15 to 75,138 units, and are still less than the level of near 1-lakh vehicles that it achieved in 2010-11 on the back of Figo's great run.

The company has already been compensating for the loss of form in India by exporting vehicles aggressively. It sold 81,703 cars overseas in 2014-15, more than the sales in the domestic market.

Harris said that the company hopes for a turnaround in India this year as it also drives in the next-generation Figo hatchback later. "It will be a fight and it's really competitive in India."

Company's global CEOMark Fields has already dubbed India as one of the toughest countries to crack. "The Indian customer is probably the most demanding and discerning on the planet. Indians are very informed, they want great value for money. They want high quality and good technology. That's why it's so important for us to be here because we learn how to compete in one of the world's most competitive small car market," Fields had told TOI earlier this year.